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Liquidity Risk: Liquidity is a measure of how quickly an investment can be sold for cash at a fair market price. If a fund can't sell an investment quickly, it may lose money or make a lower profit, especially if it has to meet a large number of redemption requests. In general, investments in smaller companies, smaller markets or certain sectors of the economy tend to be less liquid than other types of investments. The less liquid an investment, the more its value tends to fluctuate.

Long Term Investments: Investments lasting longer than 5 years.

Low (or no) Risk: A conservative investment such as a Canada Savings Bond that pays a fixed interest rate based on current rates that is virtually risk free.

M

Management expense ratio: The management expense ratio (MER) shows the percentage of the fund's daily average net assets that was paid in management fees and other expenses during the year. The MER is shown at an annualized rate if the financial year is less than 12 months. The method of calculating the MER of mutual funds was changed by securities regulators on February 1, 2000. Some expenses, such as taxes and interest that were previously excluded, are now included in the calculation.

Management Fee: The fee that the manager of a mutual fund charges the fund for managing the portfolio and operating the fund. The fee is usually expressed as a percentage of the fund's average net assets.

Market Risk: Refers to risk factors that affect financial markets as a whole. This risk is present in all financial markets, including the money, bond, stock, and currency markets. Market risk is common to all portfolios with securities traded in these particular markets. For example, market risk is present in nearly all equities in the stock market, since the prices of equities generally move together in the same direction. Market risk is due to macro-economic factors, such as major changes in interest rates. See systematic risk.

Market Value: The most recent price at which a security transaction took place.

Moderate (to high) Risk: An investment that is not guaranteed and has a greater possibility of losing the principal that has been invested. As the potential for a higher return increases, so does the risk associated with that investment.

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P/E Ratios (Price Earnings): A measure of a stock's price in relation to its earnings. A low price earnings ratio is a relatively low price in relation to the earnings of company/stock and a high price earnings ratio is one that is above the market average as a whole. It is calculated by dividing the current price per common share by the current earnings per share (EPS).

Pre-Authorized Contribution (PAC): An investment service (allocation of funds and frequency is the customer's choice) in which customers set up regular deposits to be automatically contributed to their investment.

Preferred Shares: A class of share capital that entitles the owners to a fixed dividend ahead of the company's common shares and to a stated dollar value per share in the event of liquidation. Usually, owners of these do not have voting rights unless a stated number of dividends have been omitted.

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Return (on investment): The rate of increase for an invested amount of capital. Generally, there are two ways that return is presented - the "simple" rate of return and the "historical" (or compound) rate of return.

Risk: The probability of losing capital. The more risk associated with an asset, the greater the potential for a capital loss. Increased risk can also be understood as a greater range in price or increased volatility.

RSP Clone Fund: RSP clone funds use forward contracts that are linked to the performance of underlying funds. RSP funds are created to mirror the performance of a non-Canadian fund, while remaining 100% eligible for an investor's RSP.